Social Security: America’s largest children’s program

In his commentary this morning on Weekend Edition, NPR news analyst Daniel Schorr highlighted a fact that has been glossed over by the Bush Administration in its push for private accounts: one-third of Social Security beneficiaries are not retirees… and many of them are children.

Social Security is more than just an old-age pension fund, it is a family insurance program… the primary, if not only source of support preventing low income families from falling into poverty. Citing statistics from the National Center for Children in Poverty, Schorr points out that Social Security is in fact the largest children’s program America has:

One in 15 beneficiaries of Social Security is a child under 18

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And before anybody slaps me again with that old canard that I’m just criticizing without offering my own proposals, I repeat: eliminating the wage cap and gradually raising the retirement age to match advances in life expectancy would extend solvency indefinitely.

Doesn’t look like much of a crisis, when it can be “fixed” so easily does it. What about applying all the money paid in by illegal aliens, that they will never see? Better grab it before halliburton needs an infusion.

I would appreciate more info on the “cuts in benefits … on over 5 million children, as well as disabled younger workers who can’t accumulate enough assets to start a private account.” Not sure I saw the Bush proposal for such cuts. Maybe it was in your twisted crystal ball.

A “means/asset” test for recipients of beneifts would be less costly to the economy and could easily be dovetailed with the private account plan. It would be fair if the playing of games with trusts etc. to reduce asets can be effectively dealt with. There is no reason why a retiree with pensions, big time IRA, etc. should receive their full SS payment.

No, chardonnay, it’s having wealthy people pay something closer to their fair share to maintain a compassionate program of public good, at current levels, indefinitely.

Actually, as I understand it, that doesn’t even require eliminating the ceiling; raising it somewhat would do the trick. My suggestion — raise the ceiling so that the best-paid baseball player contributes for one whole game. Right now, Alex Rosriguez stops paying his FICA tax in the top of the 6th inning on Opening Day.

“Put me clearly on the record: I don’t want to ‘reform’ Social Security or ‘rescue’ it or ‘adjust it to the new realities of the 21st century.’“

“No, I want to hit it in the head with a shovel and bury it in a New Jersey landfill.“

“It is time to kill the rotten, lousy, ‘rip off your kids to keep granny in bingo cards’ Ponzi scheme that we call Social Security, but would be more accurately described as ‘the government taking money from poor, hard-working young families and giving just enough of it to retirees to keep them broke, too’.“ –Michael Graham

Raising the wage cap has a negligible effect on the expenses of most employers because only a small fraction of typical payrolls represents payments above the current cap. For most employers, the additional payroll tax is going to increase their expenses by 1% or less. That’s not going to lead to layoffs.

The effect on higher income employees is more noticeable. Someone making $120K/yr is going to get socked with $1860/yr in additional taxes. Not a catastrophe — but surely a bummer if you’re the one getting hit. I suspect that’s the source of most complaining about raising the wage cap.

This whole social security debate is just like a Terry Schaivo arguement with you leftys – there are those that want to nurture it into being more than it is now and those of you that want to continue on till it’s dead.

Zip, the hiring decisions of companies are based mostly on the demand for their products and services. There’s no point in keeping excess workers, regardless of the level of payroll taxes. In other words, if a company is able to reduce its expenses 1% by laying off excess workers, it would have already done so — at least that’s been my management experience. It doesn’t matter if the company’s net profits are 5% or 50% — why wouldn’t you go for an extra percent if you could safely manage it?

If the company is properly managed to have the right staffing level to meet demand — reducing payroll taxes by 1% overall wouldn’t cause management to suddenly hire more people. Why take on that extra expense when they are already sufficiently staffed to meet demand? Conversely, raising taxes 1% doesn’t cause them to lay off. They will either attempt to pass on the extra cost, or they will take the (small) hit in profits. Laying off people would just reduce their production and would usually result in a bigger hit in profits.

Most companies have little if any payroll over the current cap. The effect of removing the cap will be negligible for them. The people hurt most are self-employed professionals and professional service firms (such as law firms). I suspect that that’s where most of the complaining would come from. The main effect on the latter might be reduced bonuses or increased billing rates — but it’s not going to throw anyone onto the street.

They have had to adjusted S.S. 20 times. SOS, it never really fixes the real problem. Now if you liberals had never made abortion legal we would have 45 million people possibly paying into it and therefore no need to euthanize the elderly and disabled. Now, what programs/PORK are the democrats willing to sacrifice to cut spending and save SS??? Can you just hear the crying?

S.S. isn’t supposed to be “fixed”, its a pay as you go insurance plan. -Comment by Diggindude— 4/10/05 @ 3:41 pm

Oh please, I know you aren’t THAT stupid.

Insurance plans bank on the premise that more people are going to pay IN for something they will never need except in an emergency.

Social Ponzi Scheme has more people taking even more money OUT as regular payouts.

When Social Security turned 65 in 2000, SSI benefits covered 6,688,489 Americans at a cost of $32,165,856,000, while Social Security itself disbursed some $431,949,000,000 to 45,877,506 beneficiaries. However, those staggering numbers are mere chump change compared to what lies ahead.

Suck@15 Try reading about the program from the people that run it. Like fdr says, you cant make a lie come true by repeating it.

“””””STATEMENT AT WHITE HOUSE CONFERENCE ON SOCIAL SECURITY””””” In order to be appropriate and meaningful, any necessary reform of the Social Security program should recognize the importance of two elements–its basic purpose and its current and long-range financial status.

Nature of the Social Security Program

From the inception of the Social Security program in 1935, it has always been a social insurance system designed as an income-maintenance plan in the event that certain risks occur — currently, age or disability retirement and death of the worker (either before or after retirement). Conversely, it was not intended to be an investment plan, under which every participant is supposed to receive the same investment rate of return.

The government has no Social Security obligations at all. Workers paying into Social Security are actually owed …zero …zip …nada …ZILCH.

You see, the U.S. Supreme Court decided in Flemming v. Nestor that the generational contract we know as Social Security is not a contract. Regardless of what a worker has paid in to Social Security, the benefits are whatever Congress decides at any given time.

When the system runs short of cash — and payments to retirees consume all the payroll taxes plus about half of the remaining federal budget — Social Security can easily handle the problem by slashing your benefits to pennies on the dollar. Or Congress can sock workers by raising payroll taxes through the roof. In other words, the government really doesn’t have a Social Security problem.

Great point. The current system is brain dead and being kept artificially fed, so why not remove it’s feeding tube? Most Republicans aren’t even asking for that they are asking for “stem cell research” approach to SS, so what is the deal you like pulling feeding tubes and stem cell research?

Opposing raising the cap is ideological foolishness. Those who are over $90K (which includes me) can afford to continue the payment. If pay outs are not means tested, why are pay ins?

To the start of this thread, I personally know of one family, Dad was a factory worker, Mom stayed at home with the kids. Dad dies, and of course the factory paid nothing. Social Security kept them afloat while Mom got a minimum wage job and both kids completed college. Became taxpaying citizens.

While we haven’t heard of a Bush proposal to kill payments to kids, we haven’t heard how personal accounts will help poor families struggling to get by.

When the system runs short of cash – and payments to retirees consume all the payroll taxes plus about half of the remaining federal budget – Social Security can easily handle the problem by slashing your benefits to pennies on the dollar. Or Congress can sock workers by raising payroll taxes through the roof.

That’s just ignorant. Check out the SSA Trustees’ report at ssa.gov. There you will learn:

1) At no time in the next 75 years is SS going to require “half the remaining federal budget” plus payroll taxes to meet its obligations.

2) Without making any changes, SS will be able to pay full scheduled benefits through 2041. After that, they will be able to pay at least 74% of scheduled benefits. Technically, that may be “pennies on the dollar” — but it’s a lot of pennies. In any case, even at 74%, payments will be higher than they are today even after subtracting inflation.

3) There are lots of ways to make small adjustments to retain full scheduled benefits — a combination of small adjustments would probably work best. However, if Congress wanted to fully fund the system solely through an increase in payroll tax rates, all it would take would be to raise the total rate from 12.4% to 14.32%. That’s hardly “through the roof”.

If you don’t think government should be involved with programs like SS, that’s fine with me. All you need to do is fine some politicians brave (or foolish) enough to run on that platform and get them elected. Good luck on that. In the meantime, spare us the panic-stricken fantasies of impending crisis.

“We all know a demographic crisis is looming. … If we act now it will be easier and less painful than if we wait until later.” -Bill Clinton declared in 1998 about Social Security reform. Mr. Clinton then made Social Security reform a central theme of his 1999 State of the Union address, saying, “Above all, we must save Social Security for the 21st century.”

Democratic senators in the 1990’s like Charles Robb, Bob Kerrey, John Breaux and Daniel Patrick Moynihan championed Social Security reform. “Our goal should be to eliminate poverty among the elderly” – through progressive Social Security reforms – Mr. Kerrey said.After Senator Moynihan offered a reform proposal in 1998, The Washington Post noted, “Republicans want to put Social Security reform on the back burner.”

But now that Republicans want it on the front burner, Democrats are screaming foul.

As Will Marshall, a founder of the Democratic Leadership Council and now president of the Progressive Policy Institute, said: “The Democratic Party ought to be developing a vision of a modernized social insurance system for the 21st century and moving beyond the ‘just say no’ position. If Bush is wrong, then what is right?”

Go figure. The only plan they have is to be against anyone elses plan.

In 1992, the Wall Street Journal asked President Clinton, “Let’s run a couple [of deficit cutting schemes] by you just to see if you would entertain them: raising the retirement age for Social Security benefits.” Clinton answered, “I think it’s something we ought to look at, I sure do. When Social Security was instituted … the retirement age was pegged at an age that was higher than the average life expectancy of the people paying into the system. The average person that actually drew retirement benefits spent about five or six of their adult years in retirement. Now, with the fastest growing group of the population over 80, by the turn of the century the average person could literally spend 20 years in retirement …”

To examine the system, Clinton appointed a Social Security Advisery Board. They came up with three options: a Maintenance of Benefits plan, which involved tax increases; an Individual Accounts plan, which mandated an increase in employee contribution that would be allocated to government-held individual accounts; and a Personal Security Account, with privately managed, fully funded individual accounts to replace a portion of Social Security.

He DID NOT run on it. He unveiled it after the election. As stated above, have the courage to be honest, win, and I’ll be quiet. Admit personal accounts are menat to wean us off of SS, not fix it. But do not be dishonest and expect us to be silent.

suck,suck,suck, You’re just plain full of it aren’t you. Clinton said, invest the social security surplus in wall street,but covered under the gov’t protection. Not mindlessly let wall street steal it like gwdumbfuck wants to do. In case you dont read anything, s.s. projections are based on a 1.5% economy. If we have a 1.5% economy, how in the fuck is wall street going to return 7%? Its bullshit, now pull the sweater back over your head, and take a look around. There is no impending crisis, there is no bankruptcy in s.s. looming, and gwdummy, is a first class lying s.o.b. All we need is an average economy over the next 4 decades, and the s.s. problem does not exist. I dont see why we need to fix a problem, that does not exist do you? Go read something, and stop listening to the chicken little’s, you should already know these things.

first of all, you are only posting little pieces of the report from the SS web site by the old man trustee meyers. I read the entire report and he admits it has needed adjusting many times and also admits the baby boom is goinhg to have a serious impact. second, private accounts are all about citizens owning their money to protect themselves from out of control spenders in congress. The IOU policy goes way back. maybe not as far back as the delano opium running days but it does go back to a dem controlled congress.

In his 1998 State of the Union speech, he came up with a famous slogan. “What should we do with this projected surplus?” Clinton said. “I have a simple four-word answer: Save Social Security first.”

Huh! I wonder what was he saving it from?

Soon Clinton was going around the country, touting a coming Social Security “crisis.” All of his administration’s economic achievements, he said in February 1998, “are threatened by the looming fiscal crisis in Social Security.” There should be no new spending — or, more importantly, no tax cuts — “before we take care of the crisis in Social Security that is looming when the baby boomers retire.”

Crisis? What crisis? Diggydope says there is NO crisis.

A number of Clinton’s arguments back then sound uncannily like Bush’s today, if one makes a few adjustments for newly revised figures on Social Security’s finances. “We have a great opportunity now to take action now to avert a crisis in the Social Security system,” Clinton said, again in February 1998. “By 2030, there will be twice as many elderly as there are today, with only two people working for every person drawing Social Security. After 2032, contributions from payroll taxes will only cover 75 cents on the dollar of current benefits. So we must act, and act now, to save Social Security.”

In September, Vice President Al Gore went to the Capitol for a Social Security pep rally with congressional Democrats, including House Minority Leader Richard Gephardt, Sen. Edward Kennedy, Sen. Barbara Boxer, and others. Gore said that in coming years — by 2032 — “Social Security faces a serious fiscal crisis.” Everyone in the group stayed remarkably on-message as they warned that the future was dire.

“Save Social Security first,” said Gore.

“Save Social Security first,” said Gephardt.

“Save Social Security first,” said Kennedy.

“Save Social Security first,” said Boxer.

Back in 1998, Democrats realized it was politically safe to rally around Clinton’s statements about a Social Security crisis because they knew he did not really intend to take any action that matched his rhetoric. They also knew that Clinton’s words were correct; Social Security was then, as it is now, facing a “looming fiscal crisis.” He just didn’t plan to do much about it.

Chardonnay: It’s only the numbers that matter (see #22) — Meyers other statements are just vague generalities trying to justify an agenda of moving away from SS. Why should I care how many adjustments have been needed in the past or whether Baby Boomers will have a “serious impact”? I want to know quantitatively how that affects the ability to make benefits.

So, I’ll ask again:

1) With no adjustments, will SS be able to pay at least 74% of currently scheduled benefits after 2041, or not?

2) In real (inflation adjusted) dollars, will those benefits be greater than they are now, or not?

3) Can we achieve 100% of scheduled benefits for the next 75 years just by raising payroll taxes 1.92%, or not?

If I’m right, then there is no crisis. If I’m wrong, tell me where and then we can talk.

As for Bush’s “plan”, as soon as he tells us what it is — in detail — I’ll be happy to take a look at it and see if it’s a better deal than what we have right now. So far, whenever I run the numbers on the nebulous glimpses he’s offered so far, it doesn’t look so good. But I’m open to new ideas as long as they’re honestly presented.

Suck, I cant help the fact you’re a dumbass, it runs in the chicken little party. The only crisis in s.s., is the one you gwdumbass made up. A few little tweaks, and the real numbers for actual growth, and its all better. It doesn’t really matter if YOU believe it, privatization, is as dead as the trail to osama. Bush has a make believe plan, for chicken littles like you. Go for it. Shouldn’t be too risky, with all 7 americans that believe in it.

maybe….@ 34 you are extremely talented and hilarious! dippydope lol diggydope LOL sorry diggindude, but that is funny.

scott, have you read the Ryan Sununu bills? I think they spell out the Republicans plan. There are more details on human events online but you will need to subscribe and it’s pricy. I’ll see if I can find you some details. reducing Gov’t spending is a must and that will upset alot of people who rely on federal dollars. but an absolute for SS and the deficit. The republicans must make this a priority or they lose in 06 and 08 and they know it.

did you see Patty Murray and Cantwell on TVW today? what a circus. please explain to me why in the hell would they bring that old hag Barbara Mikulski all the way from from Maryland? Between her and the student plant “hillary” it only ruined their case and made them all look so desperate.

A “means/asset” test would transform Social Security into something it isn’t and wasn’t intended to be: Welfare. Everyone who pays into the system is promised benefits in return, and the benefit level is proportionate to the SS taxes you paid. That treats everyone fairly. If wealthy people want to forego their SS checks, all they have to do is not apply for benefits. If Bill Gates wants to claim his SS checks, he should be able to. Why not? Didn’t he pay enough taxes? No, that’s NOT the answer, because it would undermine the promise of benefits to everyone who pays into the system.

The benefit formula already is heavily favoring the lower wage earners as compared to the wage earners at the cap. It is not proportional.

You think it’s more fair to tax ALL PAYROLL an additional 12.4%, potentially $10,000 or $100,000 more per year in tax for the CEO types, than it is to do a means test on the benefits? That is where we disagree. You think your “promise” of $1200 a month of SS benefits means anything to somebody who gets a $100,000 tax increase?

We’re both fixing the system on the backs of the rich guys, I’m doing it after they retire because they already have plenty of retirement income, you are doing it while they’re still working.

Chardonnay: Thanks for the tip on Ryan Sununu. I’ll take a look — probably too late to comment on this thread, but I’m sure Goldy will set us up for a few more rounds on this topic.

Dubyasux: We probably agree on much on this topic, but I’ve always been puzzled by those we refuse to consider any kind of means-testing as a way of strengthening SS. The absolutism of that argument seems too ideologically rigid. The dirty secret of SS is that it has always contained some degree of wealth transfer in that lower income people get more bang for their payroll tax buck than upper income beneficiaries. So what? Lower income people need the benefit more — and the main purpose of SS has always been to reduce poverty for the elderly and allow them to retire with dignity. To me, it’s not much different than the argument for progressive tax rates.

The fact is, the program will require some tweaks in the future. Given a choice between reducing benefits/increasing taxes for lower income people, or reducing the benefits of those who truly don’t need them, I think I would choose the latter. I don’t have exact figures, but if you eliminated benefits for the upper 5% of retired Americans, I think you would be affecting only people with net worths of over $1M and annual incomes of at least $100K. Dropping their $20K SS benefit isn’t going to have much of an impact — people at the other end of the scale require every bit of their benefits.

Maybe you have better ideas, but I see no reason not to consider means-testing.

As usual, the intensity of your rhetoric exceeds your ability to calculate:

2041 is 36 years from now — not 20.

74% represents a drop of 26% — not over 30%.

Even that drop represents a higher payout than is happening today (even after inflation). I don’t know whether that’s a “big deal” or not — but so far, it represents a higher risk-adjusted payout than any other proposal I’ve seen. If the economy does better than SS projections (as has been the case in the past), or if we make a few small tweaks, we can get back to 100% of scheduled benefits.

This is getting tiresome. You’re all emotion and empty ideology and haven’t said anything new for a while. At least zip and chardonnay are bringing something to the discussion.

I don’t care about ideology or unrelated scare factoids — all I care about is projected payouts, costs, and risk factors. Show me something better, and I’ll listen.

Scottd You cant explain math to them they dont get it. They refuse to look at the proof, and the facts that support what we have said about the projections using 1.5% growth. 1.5% growth, will not support 7% gains in the stock market, so their whole theory about s.s. reform, is based on junk figures. You cant get a wingnut to understand the numbers, let alone acknowledge them.

zip: I don’t know who your remarks are addressed to, but that’s not me you’re describing.

The only thing I’ve tried to “prove” is the actual state of the current system so we have an accurate benchmark to compare other proposals against. I appreciate the references chardonnay passed on regarding alternate proposals and I’ll be taking a look at them. Ditto on the means-testing references you provided. I think we’re more in agreement on that point.

I can’t tell you if I’m against Bush’s proposal because he hasn’t made one — at least not one with details I can measure against the status quo. So far, the little bits he’s put out don’t add up, but who knows? Maybe he’ll come up with something more specific. When he does, I’m all ears.

Sorry if offense taken. I was jabbing at dd. My beef is with the knee jerk reactions exemplified by his comments.

I am very concerned with the “tax the rich some more, they deserve it” attitude of Goldy’s original recommendation to eliminate the wage cap. Going back a few days, I am still mulling over your points on the tax hit vs layoffs. As noted in the actuary.org article, even means testing may bring in some unintended consequences.

Im not knee jerking, after all, this is what, 50 times that the same information has been posted? If you dont get it, or cant look it up for yourself by know, when will it happen? By just repeating the same “but i want private accounts” rant, YOU, my friend, are actually the kneejerker.

Yes, they are… in the great sport of haranguing and harrassing each other, NOT contributing constructively to scintillating debate. Just like amazing pet tricks, it can be quite amusing. I expect the jerking is going on a bit higher up on Dippydumbs anatomy!

Suck@yousuck, By the way, topic is s.s., think you can pull your head out of your ass long enough to check subject before posting jibberish? By your name, are you saying gwdummy is giving don a blowie? I dont know don personally, but I think gw might take offense at you suggesting his dirty knee duty. Clean it up will ya?

Clinton’s proposed SS privatization plan would have allowed only the social security trustees themselves to invest only a portion of the SS trust fund in the stock market. So for people to bring up Clinton’s quotes on the matter as if it defends Bush’s totally different privatization plan is dishonest. My bet is that you picked up on this talking point from Rush or Fox News, which just goes to show you how much contempt they hold for their audience – and you.

Namechanger@65 That twisted shit, isn’t what took place. Clinton might have reluctantly, agreed to private s.s. accounts, “AFTER” the system was stabalized with all the surplus, that shrub gave away to the wealthy. The idea was to invest the surplus, under gov’t accounts. Spin away, namechanger.

Your link says NOTHING to oppose what I said – did you actually read your own link there, Dipsy?

“Lifted by Elections, Clinton Turns Focus To the Battle to Overhaul Social Security“

“WASHINGTON — After crowing about the Democratic electoral showing, President Clinton is turning to reforming Social Security. “

“the president hopes to build public support for reform and lure lawmakers from both parties into negotiations guided by Clinton principles, but employing few Clinton particulars.“

“The president’s toughest challenge is to convince the public that there is a Social Security crisis that must be fixed now — when, economically, there isn’t one. The program isn’t projected to run a deficit until 2021, light years away politically, and even that may be conservative. Social Security projections assume that the economy will grow at less than 2% a year for decades, far weaker than the nation traditionally has managed.“

“Mr. Clinton started his public relations campaign on Wednesday, when he invited Congressional leaders to help him shape a White House conference on Social Security on Dec. 8.“

“ut, at some point next year, Mr. Clinton will likely face an unavoidable choice: Either have the government invest part of the Social Security surplus in stocks and bonds, or funnel part of Social Security taxes into retirement accounts to be handled by individual investors“

“Labor leaders and liberal Democrats worry that Mr. Clinton will seize on individual accounts to polish his record.“

And if you notice the link I provided was from that paragon of conservatism (the right thinking adult snickers sarcastically) San Fransisco.

This is your brain: 0

This is your drug addled, beer soaked, immature, high school brain: O!

It said exactly what I told you, no crisis, private accounts were not going to fly, invest the pool of surplus in the stockmarket, “AFTER” s.s. solvency issues were addressed. All the things you were wrong about, but i really dont give a flyin fuck what you think to be honest.

“The president’s toughest challenge is to convince the public that there is a Social Security crisis that must be fixed now – when, economically, there isn’t one. The program isn’t projected to run a deficit until 2021, light years away politically, and even that may be conservative. Social Security projections assume that the economy will grow at less than 2% a year for decades, far weaker than the nation traditionally has managed.“

“But, at some point next year, Mr. Clinton will likely face an unavoidable choice: Either have the government invest part of the Social Security surplus in stocks and bonds, or funnel part of Social Security taxes into retirement accounts to be handled by individual investors“

“Labor leaders and liberal Democrats worry that Mr. Clinton will seize on individual accounts to polish his record.“

Start taxing the rich at rates that are fair, then SS would be taken care of. Take away the business deductibles and the rich write offs for large landlords and boneheads like Bushmaster can start all the stupid wars that he wants to againsnt the Muslims! Social Security would be set for life if the rich would pay their share of taxes.

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